Outsourcing Philippines: Sustained Growth Signals Opportunity

In the last decade, the Philippines has secured a stranglehold on the global offshore outsourcing industry. It's been so singularly successful at this, that it has become known as the outsourcing capital of the world. It's a bit of a bold title – and one not without its challengers – but the offshore outsourcing industry in the Philippines is now an established part of the global economy.

“Business process outsourcing in the Philippines has grown to become a multibillion-dollar industry, with over 1.2 million people employed in BPOs alone inside the Philippines borders. For new or established businesses looking for a competitive advantage in a global marketplace, the Philippines should be the destination for outsourcing important business processes,” says Ralf Ellspermann, CEO of PITON-Global, a leading call center in the Philippines.

The Philippines’ outsourcing industry has been aggressively trending upward for over a decade. In 2020, it grew to $26.7 billion with its labor force growing 1.8%, all the while navigating a global pandemic that has significantly impacted the Philippines economy. With the industry expecting to grow in 2021, and revenues expected to reach nearly $29 billion by 2022, SMEs should strongly consider partnering with these premium vendors for their business processes.

There are many factors responsible for the continued growth of this industry:

1. Continued government support for offshore outsourcing incentives. The outsourcing industry in the country enjoys tax holidays, tax deductions, grants, and other financial advantages which are all meant to encourage growth. These incentives are critical to the continued growth of the industry.

2. Cost-effective labor (and a high volume of applicants) is another key factor driving BPO in the Philippines. New hires can be trained for offshore roles at a fraction of what it would cost anywhere else in the world. The average hourly pay rate to work with a premium vendor is $12-14 per hour, whereas, in the US, for example, the rate for the same work is $24-28 per hour.

3. Highly skilled and qualified labor. The Philippines produces some of the most educated and highly skilled outsourcing personnel in the world. Universities in the Philippines prepare future BPO professionals for careers in the industry and focus on developing in-demand skills, such as IT, AI, and blockchain.

4. Infrastructure. Improvements to infrastructure such as roads and facilities, as well as other critical infrastructure and technology have helped fuel the industry’s ongoing growth for the last decade.

5. Access to world-class technology. Premium BPOs in the Philippines reinvest profits back into their organizations and this includes maintaining the most current technology platforms. This means organizations partnering with these companies get access to this technology without the expense of having to implement, maintain, and train users on it themselves.

6. English-proficient culture. The Philippines is a country that is highly proficient in English, making outsourcing even easier for companies looking to partner with vendors there. It makes doing business with them less of a risk because it negates the complications and communication barriers inherent in destinations with less developed English-proficient cultures.

“Ongoing economic globalization demands that entrepreneurs, SMEs, and large multi-national organizations look for ways to remain competitive. With over two decades of success, the BPO industry in the Philippines continues to grow across all sectors, with customer support, data-processing and IT-enabled services leading the way. With ongoing government support, a highly skilled and English-proficient workforce, along with ongoing improvements to infrastructure, the Philippine outsourcing industry has risen to the task and proven itself to be an attractive risk-reward solution for companies that are looking for every advantage possible. Ultimately, all these factors signal a great opportunity for any size organization to reduce costs, increase business efficiency and realize higher ROI,” says Ellspermann.

This article does not necessarily reflect the opinions of the editors or the management of EconoTimes